Cheques payment on the decline

GLOBALLY, the use of cheques as mode of payment is consistently declining as financial institutions and their customers adopt technologically advanced payment alternatives that are far more convenient and cheaper. Johan van der Westhuizen, FNB Executive Officer: Business said cheques convey a written instruction to banks to pay money from or into a customer’s bank account and due to its manual functionality; there are substantial disadvantages that go with this option. “Over the years, the growing usage of electronic payment methods, high expenses, inefficient processes and vulnerability to fraud have been key contributors to the global decline in cheques usage. In addition, cheques do not offer users the convenience and relative security provided by digital payment solutions,” said Van der Westhuizen. The FNB banker said Namibia’s migration from cheques has mainly been driven by customers embracing the convenience of emerging technology. However, he said, all financial institutions must play a role to educate customers about alternative payment methods and their added benefits.

He pointed out the following benefits for using alternative payment methods:

Digital migration – the global community is rapidly going digital, which means acceptance of digital payments is on the increase. Customers and businesses are demanding instant and seamless integrated user-experience.

Save on fees – cheques still carry a higher expense for both the customer and their bank compared to digital payments which can be processed at a fraction of the cost.

Improved safety – Cheque fraud is a global phenomenon and Namibia is not immune, whereas digital platforms are equipped to help clients mitigate fraud at a click of a button.

“In this regard, we have innovations like Smart In Contact, which allows you to safely approve Online Banking transactions on the FNB Banking App, verify devices that login to your profile, and use secure messaging to immediately report any fraudulent transactions 24/7.

“The universal shift towards digital payments is rapidly emerging across societies and in markets such as the United Kingdom, we’ve seen dedicated working groups tasked with fact-finding around the future of cheques vs digital payments. We are also on the same mission to understand our customers’ needs and how we can help in adopting alternate payment methods,” concluded van der Westhuizen.